Plunge in Refinance Requests Pulls Mortgage Applications Down
Mortgage applications fell in the week ending May 28, according to the findings of two separate weekly surveys. Applications submitted for refinance reversed a four-week-long upward trend, plummeting 14.% in the last week, according to the Mortgage Bankers Association (MBA). The refinance share of total applications fell to 72.2%, from 73.8% a week earlier. Taken together, the falls in both refinance and purchase interest brought MBA's mortgage application index down a seasonally adjusted 12.2% this week. "Although rates remained essentially flat, refinance applications dropped this past week for the first time in a month," said MBA vice president of research and economics Michael Fratantoni, in a statement. He added; "Despite the historically low rates, many homeowners have already refinanced recently, remain underwater on their mortgages, have uncertain job situations, or have damaged credit following this downturn, and therefore may not qualify to refinance." At the same time, the total volume of applications submitted for purchase mortgages plunged 16.3%. Adjusting for the Memorial Day holiday, MBA put the seasonally adjusted decline much lower, at 5.7%. "Purchase applications are now 35% below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April," Fratantoni said. The Mortgage Maxx index, which adjusts data to reflect the number of households applying for a mortgage, found 2.8% fewer households submitted applications in the same week. Write to Diana Golobay.